Saturday, September 11, 2010

Ottmar Edenhofer claimed in „ZDF umwelt“ on September 5, 2010 “Die Aussage, der IPCC hätte bewusst Dinge herausgehalten, die ihm unbequem waren, die nicht gewissermassen in eine Gesamtstory gepasst hätten, kann ich beim besten Willen nicht sehen”. (I cannot understand, even if I try hard, the assertion that the IPCC would deliberately have omitted things, which would have been inconvenient, which would not have been consistent with the overall story.)

This assertion of the co-chair of Working Group III of the IPCC is at best peculiar if not outright false. In the following, I will back this statement in some detail, by demonstrating how specific conclusions from white publications, known to the IPCC lead authors, have been filtered out in support of a (false) claim of consensus in the Summary for Policymakers. At the time of his interview, Dr. Edenhofer was aware of these inconsistencies.

The Synthesis Report of the Fourth Assessment Report says: “studies […] that take into account induced technological change may lower the[se] price” of emission reduction; “[g]lobal modelled costs will decrease […] if induced technological learning is included”; and “[i]n the models that consider induced technological change, projected costs […] level are reduced”. The Summary for Policy Makers of Working Group III says: “In the models that adopt [induced technological change], projected costs for a given stabilization level are reduced”; “[s]tudies that assume the possibility that climate change policy induces enhanced technological change […] give lower costs”; “some [models] show GDP gains because […] they assume that more technological change may be induced by mitigation policies”; and “studies […] that take into account induced technological change lower the[se] price” of emission reduction.

Thus, AR4 argues that induced technological change reduces abatement costs. It says so three times in the Synthesis Report, and four times in the Summary for Policy Makers. In one case, the word “may” is used, but the remaining six cases express the finding without a doubt.

This is strong conclusion, but unfounded.

The IPCC puts forward its evidence in Chapter 11. Ottmar Edenhofer was a lead author. He and one of the convening lead authors, Terry Barker, have regularly argued in favor of the hypothesis that induced technological change reduces the costs of greenhouse gas emission reduction – and Chapter 11 indeed cites papers by Barker and Edenhofer in support of this result.

The evidence rests on the comparison of two sets of models – with and without induced technological change. There is no experimental evidence, and no observational evidence to support (or reject) the hypothesis. The models have not been validated. So, the hypothesis so confidently expressed by the IPCC has no empirical content.

The models used are relatively simple, conceptual models. A mathematician can understand the models’ behavior without resorting to computer simulations. In fact, the main mechanism is so simple that it can be described in a few sentences:Greenhouse gas emissions are reduced by improved energy efficiency and switching to alternative energy. Those technologies would be used more and experience would improve them. Companies would invest in R&D to further advance these technologies. That is, climate policy would reduce the costs of climate policy. This is the mechanism used in the models that support the IPCC conclusion.

However, this is not the end of the story. If smart people focus on improving clean energy technology, they will not research other issues. Climate policy will not make people smarter, so progress slows down for non-energy technologies. The cost of this would at least partly offset the gains of better energy technology, and the costs may indeed be greater than the gains.

The IPCC therefore overstated its confidence. Induced technological change may increase or decrease costs. This is an empirical question. No empirical work was done. We therefore do not know the sign with great confidence.

We can, however, make an informed guess. Energy is less than 5% of the cost of living and the cost of doing business. Accelerating technological progress in energy at the expense of decelerating technological progress elsewhere can hardly be a winning proposition. In fact, technological progress in energy initially decelerates too because of the switch to less well-developed and more expensive but clean energy.

One could therefore expect that induced technological change would increase the costs of emission reduction. Nordhaus (2002), for example, finds that induced technological change increases costs by $347 bln.

Chapter 11 says: “[w]hile some models find a large reduction in mitigation costs (e.g. Popp, 2006a), some find small impacts (e.g. Nordhaus, 2002)” and “Nordhaus finds very modest mitigation cost savings.” Although Nordhaus (2002) reports an increase in costs, the IPCC claims he finds a decrease!

Is this an honest mistake? Many of the models used in Chapter 11 are incomplete. They do not account for the negative impact of climate policy on overall technological change. On February 23, 2005, in Berlin, Peter Dixon of Monash University told the modelers that their models are incomplete – with three IPCC authors in the audience. On January 24, 2005, at an IPCC workshop in Washington DC, Sjak Smulders of Tilburg University told his audience that incomplete models tend to get the sign wrong.

Two referees of the first order draft argued that Chapter 11 should make reference to Smulders’ papers. The response was: “A very few authors (e.g. Smulders) have found that allowing for ETC in top-down models increases costs, and many have found that it reduces them. This is not a consensus, but it does suggest that the balance of findings is that inclusion of ETC in the modelling reduces the cost estimates.” One referee raised the issue again in response to the second order draft. The response was: “REJ[ect] […] The text is describing the literature. ITC through LBD reduces the costs in the model applications reviewed.”

Writing the first-order draft, the authors of Chapter 11 were aware that there is no consensus (their words) on the effect of induced technological change on the costs of emission reduction. Writing the second-order draft, the authors claimed that there is a consensus. In the published chapter, there is not a sliver of doubt on the sign. It says “those modelling studies that allow for induced technological change involve lower costs”; “induced technological change […] tend to reduce costs”; “induced technological change […] has its own opportunity costs, which may reduce the potential for cost reduction […] substantially”; and “at the upper end of the range, including [induced technological change] […] reduces mitigation costs by about 90%, but at the lower end it makes no difference”. According to Chapter 11, induced technological change may have a small or a large positive effect on costs – but it cannot have a negative effect.

Chapter 11 cites two papers (Nordhaus, 2002; Smulders, 2005) that show the opposite. The authors were told at two meetings that their hypothesis does not stand. Review comments on both drafts pointed out that Chapter 11 misrepresents the literature.

41
comments:

Anonymous
said...

Now, at least, we understand why you call a lie a "lie". One scientist (Mr. Von Storch in another Tv broadcast) said "there have been exaggerations". The other side ( Mr. Rahmstorf) said "no exaggerations at all". Obviously one of them doesn't tell the truth.

In your case Edenhofer knows that what he says is not true. So he is "lying".

In my example, if Mr. Von Storch is right and Mr. Rahmstorf wrong, maybe Mr. Rahmstorf also knows he is lying.

I once posted at Climateaudit that I could prove Mr. Rahmstorf to be lying about some special thing. My post did only survive a few minutes before it was deleted.

At Realclimate I was explaining later that a post about a climats scientist at Climateaudit was immediately removed and that they never allowed insults etc... Well, my post at Realclimate was also immediately deleted. ;-)

For some climate scientists truth and honesty are dangerous weapons; ;-) some kind of occult voodoo science! ;-)))

Judith Curry on this subject:

"They chose comments that consisted of personal attacks, while rejecting many comments that were supportive of my viewpoints or asked challenging questions. The reason that I know what comments were rejected because many of these people subsequently posted on climateaudit or emailed me. In one instance, a comment was rejected by CP from someone who had previously made a guest post at RC. So this reflects not only on their readership, but reflects specific choices made by the moderators at RC and CP, that I personally interpret as an attempt to discredit me."

"The evidence rests on the comparison of two sets of models – with and without induced technological change. There is no experimental evidence, and no observational evidence to support (or reject) the hypothesis. "

That sounds as if there could be (should be?) experimental evidence for such techno-societal evolution. I have no idea what that could be. We take two societies/planets one with and one without green technologies?

"If smart people focus on improving clean energy technology, they will not research other issues. Climate policy will not make people smarter, so progress slows down for non-energy technologies."

That sounds not very plausible. Intelligence is in any case not a result of a zero-sum game. "Oh I thought too much about Erika now I cant think about Monica anymore". Also with all the smart people developping video games I have the impression there are some unused potentials somewhere. And finally yes I think people do become smarter and there is in fact evidence for that.

"“Nordhaus finds very modest mitigation cost savings.” Although Nordhaus (2002) reports an increase in costs, the IPCC claims he finds a decrease!"

Finally in all these proofs how badly behaved those guys I somehow miss your point about the actual subject (and hey why not speaking for once about the actual issue and not on the meta-issue how it was treated in the AR4). Do you think that there will be or not technological benefits when investing in green technologies? It seems not (?), so my question is why the state, actually every state invests so much in high technology if there are in general (?) no side effects for employment, taxes and so on.

Georg,you wrote „why not speaking for once about the actual issue and not on the meta-issue how it was treated in the AR4”?My answer to this is: the credibility of science – i.e., the motivation for believing in the unbiased expertness of scientists, and the unbiased validity of the assertions about “actual issues” – is based on this meta-stuff. Science is by many believed to be a superior knowledge generating system because of its methodology. The old Feynman saying of trying hard to falsify. The possibility for independent parties to redo and to object. If you wish: Merton’s criteria. When the Chair of WG III is participating in an effort of framing a controversial issue as consensual, then there is a problem in the credibility-generating set-up of IPCC. Why should I believe him next time, when he makes a statement, if he was involved in this framing (I hope he will respond and deconstruct Richard’s claims as false). But the other observers, they will think – “this is normal among these people” (us two included); they are not scientists but just government-paid representatives of special interests. This is the fodder, which generates skeptics. I understand that you do not consider the “meta-stuff of compiling AR4” really relevant, possibly because you consider the political issue, the science is related to (climate change policy), as so important that minor glitches in the methodology become insignificant. Such a position I would consider a-historical – we had such cases – and in some time, a societal response will follow, which will be paid by you and me, Georg, and our field (and science in general). When you consider the reputation of climate science in these days, and just one year before, you see the process in action.I welcome the comment by Richard as it represents for me an effort to rebuild scientific credibility – by enforcing openness.

My latest take on the costs of emission reduction is here: http://www.voxeu.org/index.php?q=node/4422

That paper has since been published in Climatic Change Letters.

Our take on the impact of emission reduction on employment is here:http://ideas.repec.org/p/esr/wpaper/wp329.html

That paper is conditionally accepted for the Energy Journal.

Why do politicians in North America, Europe, and Japan claim that there is a Green New Deal when in fact the empirical evidence has none? Well, part of the answer is that there are organizations like the IPCC who'd rather toe the party line than tell the truth.

Very interesting.One thing, however, i do not get:Why does improving clean energy technology "slow down non-energy technologies"?First of all, wouldn't it slow down "dirty energy" technologies? Why other technologies?And, since the clean energy technologies aren't as well developed, aren't the marginal gains targeted at improving efficiency higher?

You could argue that the effort to improve clean energy only takes from efforts to improve dirty energy. In that case, the IPCC would be correct.

However, because a forced shift to clean energy would initially increase the costs of providing energy, the return of R&D in energy increases and would take from efforts to improve non-energy technology.

People are piling into clean energy at the moment. If you look at their profile, then you find that those working on carbon capture and storage or on ocean energy might also have worked on oil and gas. This is not the case for wind -- their skills are useless in the fossil fuel industry. The car manufacturers have rejigged their R&D to focus on energy efficiency -- rather than safety or comfort. Google employees are working on improving solar power and energy efficiency.

It's not just theory, so. It's happening (although the only evidence to date is anecdotical).

I am fine with treating the credibility of science from time to time. But after all, science is also interesting, isnt it? I at least couldnt find the place in Richards Philippika where he says: And this is wrong because this equation has the wrong sign and this data set is out of date and you-know-the-science-talk. Something along these lines. At the end I learned just that some citation was not right (though even there I still cannt see the point) and that he thinks or feels that this is somehow due to systematic political fraud organised by some IPCC lead authors. Now he became the lead author. Let's hope everything will change to the better.

I am pretty sure that in a public presentation you and I tell nearly the same stuff and I pass much time on showing uncertainties and allways steal your joke about people thinking they will stop sea level rise when taking a bycicle.

I think we disagree basically on two points.1) You think that credibility is a function of the one who is judged by the public depending on what he/she actually did or not did. I don’t think that’s true. Even if you, Richard and Roger Pielke sr will write the next report, as long as this report mentions the simple and quit embarrassing fact that Pliocene CO2 levels will heat the planet to Pliocene temperature levels as long your credibility can be smashed faster than you can say: Carbon sequestration. Economic and political forces rise and destroy your credibility depending on many factors and one of the last important will be if you’ve interpreted correctly a paper by Nordhaus 2002. So doing a good job in these reports is for the scientific community itself but hardly for their public credibility. Remember, a scandal in politics is not because a politician was corrupt, had external affair, was smoking Cuban cigarres but because his political support became weak. A scandal is a consequence of his weakened power and not of his behaviour. Once the IPCC got in the line of fire and lost parts of its political support it was clear that someone finds out that Pachauri makes extra money or Jones had an biased opinion on paleo papers. That does not mean that Pachauri SHOULD make extra money or that IPCC authors SHOULD have biased judgments. But wheather they do/have or not does nor affect the IPCC credibility nor the credibility of science in general.2) There is no political neutral standpoint in this debate. So I dont buy the entire brooker thing. It is clear that someone like Hansen thinks that the IPCC with its rather conservative approach is hardly anymore helpful for the problem he thinks there are whereas Richard thinks that eco-radicals hitchhiked the world or the EU or whatever and manipulate us to Orwells 1994. So if its true that there is no neutrality than better present science the best way you can and say your political opinion anyway. I at least (since you said something about that) have no strong political opinion how to deal with the entire CO2 problem (meaning I see a kind of a problem but I have no clue what to do).

@HansI am fine with treating the credibility of science from time to time. But after all, science is also interesting, isnt it? I at least couldnt find the place in Richards Philippika where he says: And this is wrong because this equation has the wrong sign and this data set is out of date and you-know-the-science-talk. Something along these lines. At the end I learned just that some citation was not right (though even there I still cannt see the point; see my question to Richard) and that he thinks or feels that this is somehow due to systematic politically motivated fraud organised by some IPCC lead authors. Now he became the lead author. Let's hope everything will change to the better.

I am pretty sure that in a public presentation you and I tell nearly the same stuff and I pass much time on showing uncertainties and allways steel your joke about people thinking they will stop sea level rise when taking a bycicle.

Part III (sorry there was no other way to get this posted no idea why)

2) There is no political neutral standpoint in this debate. It is clear that someone like Hansen thinks that the IPCC with its rather conservative approach is hardly anymore helpful for the problem he thinks there are whereas Richard thinks that eco-radicals hitchhiked the world or the EU or whatever and manipulate us to Orwells 1994. So if its true that there is no neutrality then better present science the best way you can and say your political opinion anyway. I at least (since you said something about that) have no strong political opinion how to deal with the entire CO2 problem (meaning I see a kind of a problem but I have no clue what to do).

Of course I will "believe" it (there should be no "believe" involved in it; but anyhow). So I will read it since the result seems to me counterintuitive (but my intuition in economics might be rather bad).

@Richard"All you need to do prove the IPCC wrong, is find one paper that draws an opposite conclusion."

Hardly. There is a reviewed paper in Energy and Environment that "demonstrates" that CO2 was up to 450ppm in the 1940s. It was not considered by the IPCC. I can give many more examples when needed.

So besides of beeing published some plausibility and credibility does not do any harm for being considered by the IPCC.But as I said I try to better understand the actual science and not just one sign.

@Richard I try to engage, but I thought it's better to read about it before, in particular because of my layman status concerning this matter. It was actually you who tried to convince that I have just to check for the pure existence of a peer reviewed paper to demonstrate that the IPCC is wrong. I think that is obviously not a valid method.

So I hope it fine with you when I try to understand a bit more what we are actually talking about. And thank you for the links.

PS Part II above is still missing.I dont know why.

PPS Economy is obviously a much more ideological type of science than radiation physics. Does the IPCC actually cite hardcore communists approaches how to tackle climate change economy? I mean, are there any papers of Chavez economists or Chinese theoreticians or Cuban scientists? Or the Northcorean way to deal with climate change? If such studies exist why apparently (?) they were not considered in the IPCC? And if they not exist why is nobody interested in this issue in China?

Thank you for your answer.After thinking it through it is obvious. Since "dirty energy" is more advanced and established, generating the same amount of energy will need higher investments in form of capital or labor with clean energy.So the question is whether the higher investment is higher or lower than the external costs of "dirty energy". And how much more efficient clean energy needs to become to economically justify a switch, if that is not already the case.Which, of course, is just layman's kitchen table science.

There is no need to talk about Energy & Environment, North Korea, or ideology. We do not need to worry about whether those N papers are representative of the literature, or whether the literature is any good. It is simply a matter of checking whether the IPCC statements are true in a very narrow sense of that word.

Ok, Richard. I will not read something on the subject, promised. I will not even read what the IPCC wrote on the subject. You are right.

I can already congratulate your IPCC co-authors for the pleasure working with you. Good luck folks.

PS

I try again to submit part II from above after reformating. Sorry.

@Hans Part II

I think we disagree basically on two points.

1) You think that credibility is a function of the one who is judged by the public depending on what he/she actually did or not did. I don’t think that’s true. Even if you, Richard and Roger Pielke sr will write the next report, as long as this report mentions the simple and quit embarrassing fact that Pliocene CO2 levels will heat the planet to Pliocene temperature levels as long your credibility can be smashed faster than you can say: Carbon sequestration. Economic and political forces rise and destroy your credibility depending on many factors and one of the last important will be if you’ve interpreted correctly a paper by Nordhaus 2002. So doing a good job in these reports is for the scientific community itself but hardly for their public credibility. Remember, a scandal in politics is not because a politician was corrupt, had external affair, was smoking Cuban cigarres but because his political support became weak. A scandal is a consequence of his weakened power and not of his behaviour. Once the IPCC got in the line of fire and lost parts of its political support it was clear that someone finds out that Pachauri makes extra money or Jones had an biased opinion on paleo papers. That does not mean that Pachauri SHOULD make extra money or that IPCC authors SHOULD have biased judgments. But if they do/have or not does nor affect the IPCC credibility nor the credibility of science in general. The “credibility” of a person is judged more or less exclusively within the system (here Science).

Ok, Richard. I will not read something on the subject, promised. I will not even read what the IPCC wrote on the subject. You are right.

I can already congratulate your IPCC co-authors for the pleasure working with you. Good luck folks.

PS

I try again to submit part II from above after reformating. Sorry.

@Hans Part II

I think we disagree basically on two points.

First - You think that credibility is a function of the one who is judged by the public depending on what he actually did or not did. I don’t think that’s true. Even if you, Richard and Roger Pielke sr will write the next report, as long as this report mentions the simple and quit embarrassing fact that Pliocene CO2 levels will heat the planet to Pliocene temperature levels as long your credibility can be smashed faster than you can say: Carbon sequestration. Economic and political forces rise and destroy your credibility depending on many factors and one of the last important will be if you’ve interpreted correctly a paper by Nordhaus 2002. So doing a good job in these reports is for the scientific community itself but hardly for their public credibility. Remember, a scandal in politics is not because a politician was corrupt, had external affair, was smoking Cuban cigarres but because his political support became weak. A scandal is a consequence of his weakened power and not of his behaviour. Once the IPCC got in the line of fire and lost parts of its political support it was clear that someone finds out that Pachauri makes extra money or Jones had an biased opinion on paleo papers. That does not mean that Pachauri SHOULD make extra money or that IPCC authors SHOULD have biased judgments. But if they do or not does nor affect the IPCC credibility nor the credibility of science in general. The “credibility” of a person is judged more or less exclusively within the system (here Science).

So Nordhaus 2002 basically finds that the CO2 reducing effect of induced innovation (=rising carbon price leads to R&D and therefore to more efficient solutions) is half as big as the effect of substitution (= investing capital and labor in products that use less CO2)?

However, I do not find where Nordhaus states that induced technological change increases costs.

I only see that the public welfare with substitution is 347 bn$(1990) bigger than than the welfare with induced innovation.

How does that translate into an "increase in costs"? (might be that I just dont understand the paper)

@FlinNordhaus's "with substitution" is "without induced innovation". Welfare is higher with substitution, so costs are lower.

To add to the confusion, Nordhaus finds that climate policy leads to an increase in welfare (because he also takes account of the avoided impacts of climate change) -- the scenario with induced innovation leads to a lower welfare gain than the scenario without.

The paper is no hallmark of clarity, but that's no excuse as the IPCC is full of top notch academics.

For some mysterious reason, the system is not accepting a somewhat lengthy copmment by Georg Hoffmann - this is another try, this time by Hans von Storch:

@Hans

I am fine with treating the credibility of science from time to time. But after all, science is also interesting, isnt it? I at least couldnt find the place in Richards Philippika where he says: And this is wrong because this equation has the wrong sign and this data set is out of date and you-know-the-science-talk. Something along these lines. At the end I learned just that some citation was not right (though even there I still cannt see the point) and that he thinks or feels that this is somehow due to systematic political fraud organized by some IPCC lead authors. Now he became the lead author. Let's hope everything will change to the better.

I am pretty sure that in a public presentation you and I tell nearly the same stuff and I pass much time on showing uncertainties and always steal your joke about people thinking they will stop sea level rise when taking a bicycle.

I think we disagree basically on two points.

1) You think that credibility is a function of the one who is judged by the public depending on what he/she actually did or not did. I don’t think that’s true. Even if you, Richard and Roger Pielke sr. will write the next report alone, as long as this report mentions the simple and quit embarrassing fact that Pliocene CO2 levels will heat the planet to Pliocene temperature levels as long your credibility can be smashed faster than you can say: Carbon sequestration. Economic and political forces rise and destroy your credibility depending on many factors and one of the least important factors will be if you’ve interpreted correctly a paper by Nordhaus 2002. So doing a good job in these reports is for the scientific community itself but hardly for their public credibility. Remember, a scandal in politics is not because a politician was corrupt, had external affair, was smoking Cuban cigarres but because his political support became weak. A scandal is a consequence of his weakened power and not of his behaviour. Once the IPCC became in the line of fire and lost parts of its political support it was clear that someone finds out that Pachauri makes extra money or Jones had an biased opinion on paleo papers. That does not mean that Pachauri SHOULD make extra money or that IPCC authors SHOULD have biased judgments. But if they do/have or not does nor affect the IPCC credibility nor the credibility of science in general.

2) There is no political neutral standpoint in this debate. Basically I don’t but the whole Brooker thing. It is clear that someone like Hansen thinks that the IPCC with its rather conservative approach is hardly anymore helpful for the problem and pending threads he thinks exist whereas Richard thinks that eco-radicals hitchhiked the world or the EU or whatever and manipulate us to Orwells 1994. So if its true that there is no neutrality then better present science the best way you can and say your political opinion anyway. I at least (since you said something about that) have no strong political opinion how to deal with the entire CO2 problem (meaning I see a kind of a problem but I have no clue what to do).

Hansen: "The Venus syndrome is the greatest threat to the planet", "death trains", "faustian bargain" "runaway greenhouse effect" ... "The reason is this - coal is the single greatest threat to civilisation and all life on our planet".

What you do here is building up a perfect straw man.

http://en.wikipedia.org/wiki/Straw_man

If truth, honesty, transparency, fairness and integrity are your ennemies, maybe 1894 is not so far away? ;-)))

I know, Georg, it's difficult. Only the best deserve it. But I appreciate how hard you try:

"Even if you, Richard and Roger Pielke sr. will write the next report alone, as long as this report mentions the simple and quit embarrassing fact that Pliocene CO2 levels will heat the planet to Pliocene temperature levels as long your credibility can be smashed faster than you can say: Carbon sequestration."

The difference ($347 bn) is between welfare change due toa) substitution alone (+$585 bn)b) ITC alone (+$238 bn)... under conditions of a carbon tax adjusted to maximize welfare. This is a COST only when a $ spent on ITC is a $ not spent on substitution. Nordhaus (2002) do not make this assumption. In fact, the $347 bn cannot be an opportunity cost because by definition, capital and labor are substituted for carbon...

"In the standard substitution approach, an increase in the price of carbon energy leads to a substitution of capital and labor for carbon energy, moving along the production isoquant from A to B. In the usual approach, substitution is costless and reversible."

What Nordhaus do is imagine a world where such substitution is impossible, and then ask what is the maximum welfare gain due to expenditure on innovation. That figure ($238 bn) sets an upper limit in the real world where substitution reduces the carbon efficiency gains due to ITC.

"One could therefore expect that induced technological change would increase the costs of emission reduction."

does not follow from the mechanism...

"Energy is less than 5% of the cost of living and the cost of doing business. Accelerating technological progress in energy at the expense of decelerating technological progress elsewhere can hardly be a winning proposition. In fact, technological progress in energy initially decelerates too because of the switch to less well-developed and more expensive but clean energy."

... which reduces the welfare gain from innovation, it does not force that gain to be negative.

I think you could respond with plain English to points of logic made in plain English. Going straight into maths using undefined symbols and unexplained equations and unexplained relations to the points made is kinda insensitive. Seems like a brushoff. Not everyone is versed up as you are. The points seem simple really... Nordhaus state "substitution is costless". If it's not a case of EITHER you have substitution ALONE with a welfare gain of +$585 bn OR innovation ALONE with a welfare gain of +$238 bn, then subtracting 585 from 238 does not give the cost of innovation...

@LazarThe math in #36 maps to the words you copied in #35. The words you copied are not about the sign of the opportunity costs -- that's the paragraph starting with "However, that's not the end of the story." The words you copied are about the likely, relative size of the opportunity costs.

Now, you just say "does not follow" without being explicit about the fault in my logic. Unless you make yourself clear, there is nothing I can do to explain.

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